NOVO-OGARYOVO, October 25 (RIA Novosti)
Rosneft’s landmark deal to buy British oil major BP's 50 percent stake in Russia’s third largest oil producer TNK-BP will help Rosneft become more transparent, President Vladimir Putin said on Thursday.
The agreement with BP selling its 50 percent stake in TNK-BP in a shares and cash deal will allow the British oil major to have its representative in the Rosneft board of directors, Putin said at a meeting with a group of political scientists and economic experts known as the Valdai Club.
“And this is already a separate story that will ensure further transparency of the activity of our largest [oil] company,” Putin said.
Putin said both he and the government had doubts about Rosneft’s bid to buy BP’s stake in TNK-BP.
These doubts related to the possibility for Rosneft to expand its presence on the market at the expense of the foreign partner.
“A fear emerged that the second part of TNK-BP might be taken over by Rosneft. This does not correspond to our general trend towards restricting the expansion of the state sector,” he said.
However, the Russian authorities decided to allow the transaction after BP turned to Russia’s government after failing to reach agreement with the Russian billionaire shareholders in TNK-BP, Putin said.
BP announced its decision to quit TNK-BP, which accounts for a quarter of the British oil giant's global production and almost a fifth of its reserves, in June 2012 after a long-standing row with the Russian oligarchs that cost BP some of its control over the company.
Rosneft announced on Monday it had reached agreement with British oil major BP to acquire its 50 percent interest in TNK-BP in exchange for $17.1 billion in cash and 12.84 percent Rosneft shares currently held in treasury.
In a similar deal, Rosneft agreed to repurchase the remaining 50 percent stake in TNK-BP from the AAR consortium of Soviet-born billionaire shareholders “for cash consideration of $28 billion.”
BP also intends to use $4.8 billion of the cash consideration to acquire a further 5.66 percent stake in Rosneft from the Russian government. Therefore, after the proposed transaction is completed, BP will acquire a total 18.5 percent stake in Rosneft and net $12.3 billion in cash.
“This would result in BP holding 19.75 percent of Rosneft stock, when aggregated with BP’s 1.25 percent current holding in Rosneft,” BP said.
Rosneft’s deal for the all-out purchase of TNK-BP would make it the world’s largest publicly traded oil company, with higher crude production than global energy titans Exxon Mobil and Royal Dutch Shell.
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